BILL ANALYSIS �
AB 2420
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Date of Hearing: April 9, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 2420 (Nazarian) - As Introduced: February 21, 2014
SUBJECT : Well stimulation treatments: local prohibition.
SUMMARY : Allows a city or county to adopt and enforce a local
ordinance prohibiting well stimulation treatments.
EXISTING LAW :
1)Defines "hydraulic fracturing" as a well stimulation that, in
whole or in part, includes the pressurized injection of
hydraulic fracturing fluid or fluids into an underground
geologic formation in order to fracture or with the intent to
fracture the formation, thereby causing or enhancing the
production of oil or gas from a well.
2)Defines "well stimulation treatment" as any treatment of a
well designed to enhance oil and gas production or recovery by
increasing the permeability of the formation. Well
stimulation treatments include, but are not limited to,
hydraulic fracturing treatments and acid well stimulation
treatments.
3)Establishes the Division of Oil, Gas and Geothermal Resources
(DOGGR) under the Department of Conservation to supervise the
drilling, operation, maintenance, and plugging and abandonment
of onshore and offshore oil, gas, and geothermal wells, as
specified.
4)Allows, pursuant to the California Constitution, a county or
city to make and enforce all local, police, sanitary and other
regulations not in conflict with state law (known as police
powers).
5)Allows, pursuant to the California Constitution, charter
cities to make and enforce all ordinances and regulations in
respect to municipal affairs.
6)States that the Legislature hereby finds and declares that the
management, development, and operation of lands as a unit for
the production of oil and gas aids in preventing waste,
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increases the ultimate recovery of oil and gas, and
facilitates increased concurrent use of surface lands for
other beneficial uses.
7)States, for the chapter in the Public Resources Code dealing
with Unit Operation (Chapter 3.5 commencing with Section 3630)
contained in Division 3 (Oil and Gas) that that Chapter shall
not be deemed a preemption by the state of any existing right
of cities and counties to enact and enforce laws and
regulations regulating the conduct and location of oil
production activities, including, but not limited to, zoning,
fire prevention, public safety, nuisance, appearance, noise,
fencing, hours of operation, abandonment, and inspection.
8)Allows the legislative body of a county, city, including a
charter city, or city and county, to protect the public
safety, health, and welfare, to adopt as an urgency measure an
interim ordinance prohibiting any uses that may be in conflict
with a contemplated general plan, specific plan, or zoning
proposal that the legislative body, planning commission or the
planning department is considering or studying or intends to
study within a reasonable time.
9)Requires a four-fifths vote of the legislative body for
adoption of an interim ordinance, and specifies that the
ordinance shall be of no further force and effect 45 days from
its date of adoption.
10)Allows, after notice and public hearing as specified, the
legislative body to extend the interim ordinance for up to 22
months and 15 days.
11)Specifies that the legislative body shall not adopt or extend
any interim ordinance unless the ordinance contains
legislative findings that there is a current and immediate
threat to the public health, safety, or welfare, as specified.
FISCAL EFFECT : None
COMMENTS :
1)Purpose of this bill . This bill authorizes a city or county
to adopt and enforce a local ordinance prohibiting well
stimulation treatments. This bill is author-sponsored.
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2)Background on hydraulic fracturing . The following information
is contained in the background paper produced by the Senate
Natural Resources and Water Committee and the Senate
Environmental Quality Committee for a joint informational
hearing the Committees held on February 12, 2013.
"Hydraulic fracturing, commonly known as fracking, is a
strategy for stimulation oil and gas production whereby water
and chemicals are pumped into the well under high pressure to
create or enlarge cracks in the rock formations surrounding
the well. Sand is also injected to help keep the cracks open
after the fracturing process is completed. It is often used
in conjunction with horizontal drilling, in which a well bore
runs horizontally through the production zone to increase the
zone of contact between the well bore and the hydrocarbon
producing formation. Hydraulic fracturing is used to extract
oil and gas from unconventional sources such as shale rock.
Shale rock may contain large reservoirs of oil and gas, but
the hydrocarbons are difficult to extract because they are
trapped in the relatively impermeable rock. The innovation of
horizontal drilling combined with hydraulic fracturing has
made shale fossil fuel development economically feasible in
recent decades.
Hydraulic fracturing has been employed in California since the
1950s. With no systematic public tracking of its use,
estimates of how many wells in California have been fracked
vary. Informal reports from industry sources suggest that a
majority of wells in the state are fracked. However, the
Western States Petroleum Association voluntarily reported to
DOGGR in 2012 that it members fracked 628 new and existing oil
and gas wells in California in 2011, which represents about
27% of the 2300 new wells drilled or 1% of the more than
50,000 existing wells. Industry voluntarily reports fracked
wells on the website, FracFocus.org, although the terms of use
of the site restrict the use of the data."
3)SB 4 (Pavley, 2013) . SB 4 (Pavley, Chapter 313, Statutes of
2013) establishes a comprehensive regulatory program for oil
and gas well stimulation in California. The bill contained a
number of changes, including the following (for full
discussion please see analysis of SB 4):
a) Defines "well stimulation treatment" in statute;
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b) Requires the Secretary of the Natural Resources Agency,
on or before January 1, 2015, to complete a comprehensive
independent scientific study on well stimulation
treatments;
c) Requires DOGGR, in consultation with the Department of
Toxic Substances Control (DTSC), the State Air Resources
Board (ARB), the State Water Resources Control Board
(SWRCB), the Department of Resources, Recycling and
Recovery (CalRecycle), and any local air districts and
regional water quality control boards in areas where well
stimulation treatments may occur, to adopt rules and
regulations specific to well stimulation treatments, on or
before January 1, 2015; and,
d) Requires the operator of an oil and gas well who wishes
to perform well stimulation treatments to first apply for a
permit with DOGGR to conduct such treatments, and requires
the permit to include specified information.
1)Letter to the Senate Journal on SB 4. Senator Pavley
submitted the following letter to the Senate Journal on
September 12, 2013:
I have authored Senate Bill 4 to provide regulatory
accountability and public transparency to the use by the oil
and gas industry of hydraulic fracturing, acidization and
other practices to stimulate production from California's
wells. I am submitting this letter to the Senate Journal to
provide clarity to the intent of Senate Bill 4.
Senate Bill 4 provides comprehensive statutory direction to
the Division of Oil, Gas and Geothermal Resources, working
with other regulators, to promulgate rules and regulations
governing well stimulation treatments of oil and gas wells.
This is achieved in part through adding a discretionary permit
requirement for all well stimulation activity under section
3160 to the Public Resources Code. It is my intent that
existing standards of judicial review shall not be altered by
section 3160 (d)(2)B). In accordance with the savings clause
in section 3160(n), this subparagraph is also not intended to
preempt existing laws, regulations, and orders that may
require additional review or mitigation associated with well
stimulation treatments, including, local government's
authority over land use, the oil and gas supervisor's
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emergency powers under Section 3226 of the Public Resources
Code, the Governor's constitutional and statutory powers to
issue a moratorium or a ban (e.g. under the California
Emergency Services Act), and the ability of any other state
or local agencies, including local air districts, to exercise
their authority within their respective jurisdictions, as
delineated in the Assembly Floor analysis of September 9, 2013
(emphasis added).
Likewise, the environmental review and other pre-conditions of
stimulating existing wells under Section 3161, while
regulations are being finalized, are also not intended to
conflict with the savings clause in Section 3160 (n), and any
of the preserved authorities enumerated above. Moreover, it
is not my intent that any well stimulations be allowed to
proceed under this section, unless full compliance with the
substantive requirements of this article (sections (b),(d) and
(g)) are certified by the operator as having been met.
To the extent any clarification is necessary regarding the
intent of these provisions, I will pursue legislation to
clarify this matter at the earliest possible opportunity.
2)Author's statement . The author notes that "With the enactment
of SB 4 last year, AB 2420 clarifies the authority of cities
and counties to adopt and enforce a local ordinance
prohibiting well stimulation treatments. Given that we cannot
predict the long-term consequences of fracking, AB 2420
empowers local governments to take necessary action to protect
their residents from potential health effects, to protect
their water supply, and the environment. AB 2420 ensures that
local ordinances will withstand legal challenges.
Specifically, preemption questions may arise given that SB 4
has recently been enacted into law. Prior to SB 4, there was
no uniform statewide policy of fracking practices in the
state; however, passage of SB 4 may raise issues locally as to
the authority of cities and counties to implement local bans
on well stimulation treatments."
3)Police powers and emergency moratoriums . The California
Constitution, in Article XI, Section 7, allows a city or
county to make and enforce all local, police, sanitary, and
other regulations not in conflict with state law, commonly
known as "police powers." This police power is broad in
scope, so long as the exercise of the police power has a
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rational relationship to a legitimate governmental purpose
such as the protection of the public's health, safety, or
general welfare. This police power is exercised through land
use regulations, such as zoning ordinances, local agency
plans, and other types of ordinances.
Existing law also allows the legislative body of a city or
county to protect the public safety, health, and welfare by
adopting as an urgency measure an interim ordinance that
prohibits any uses that may be in conflict with a contemplated
general plan, specific plan, or zoning proposal that the
legislative body, planning commission or the planning
department is considering studying or intends to study within
a reasonable time. In order to pass an interim ordinance in
this manner, a four-fifths vote of the legislative body is
necessary, and the ordinance is only effective for 45 days.
This emergency moratorium can be extended, after notice and
public hearing, and upon a four-fifths vote, up to 22 months
and 15 days (2 years total). The ordinance cannot be adopted
or extended unless it contains legislative findings that there
is a current and immediate threat to the public health,
safety, or welfare, as specified.
4)Recent actions by local governments . A number of local
governments have taken action to limit or regulate fracking
within their jurisdictions, including the following:
a) San Benito County, on June 18, 2013, adopted an
ordinance to put in place notice, chemical disclosure,
bonding, insurance, water testing and other requirements
that expressly apply to well operators engaged in drilling,
fracking and other well stimulation activities.
b) Santa Cruz County, on September 10, 2013, adopted a
temporary ban (interim ordinance) on hydraulic fracturing
method of gas and oil extraction. The ban was extended by
10 months and 15 days on October 22, 2013.
c) The City of Los Angeles, on February 28, 2014, approved
a motion asking for the City Attorney to draft an ordinance
to prohibit fracking and acidizing in Los Angeles.
d) The City of Carson, on March 18, 2014, passed a 45-day
ban on all new drilling.
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Other jurisdictions have passed resolutions asking the State
for an immediate moratorium on fracking in California and
include the County of Marin, the cities of Berkeley and Culver
City, and the San Francisco Board of Supervisors.
5)Policy considerations . The Committee may wish to discuss the
following:
a) Is legislation needed to state explicitly in law the
ability of a city or county to prohibit fracking or well
stimulation treatments, or are the recent actions by
several cities and counties are evidence that local
agencies believe they have this authority already under
their general police powers?
b) Is legislation needed to clarify what a city or county
can do after an emergency moratorium (interim ordinance)
has expired?
c) How does this bill interplay with SB 4, in light of
Senator Pavley's letter to the Senate Journal to clarify
the intent of SB 4?
6)Arguments in support . None on file.
7)Arguments in opposition . Opponents argue that SB 4's
requirements for an independent scientific study,
environmental review, new permitting process, and adoption of
new regulations specific to well stimulation treatments should
be given an opportunity to work before the Legislature
substantially modifies the regulatory structure and certainty
that it put in place just last year.
8)Double-referral . This bill is double-referred to the Natural
Resources Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
California Chamber of Commerce
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California Independent Petroleum Association
Western States Petroleum Association
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958